Free-rider problem - Revision history

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	[[Category:Done ~~2016~~-04-30]]		[[Category:Done 2026-08-01]]
	[[File:lighthouse.jpg\|400px\|thumb\|right\|Figure 1. The Amedee Lighthouse on the French overseas dependent territory of New Caledonia.<ref>Wikimedia Commons. [Online], Available: https://commons.wikimedia.org/wiki/File:Amedee_Lighthouse_-_New_Caledonia.jpg [Aug 17, 2016]</ref>]]		[[File:lighthouse.jpg\|400px\|thumb\|right\|Figure 1. The Amedee Lighthouse on the French overseas dependent territory of New Caledonia.<ref>Wikimedia Commons. [Online], Available: https://commons.wikimedia.org/wiki/File:Amedee_Lighthouse_-_New_Caledonia.jpg [Aug 17, 2016]</ref>]]
			<onlyinclude>When a person (or company) enjoys the benefits of a [[public good]] without contributing to the [[cost]] of it, they are known as a '''free-rider'''.<ref>A. Goolsbee, S. Levitt and C. Syverson. ''Microeconomics''. New York: Worth Publishers, 2013, pp. 674.</ref> These free-riders become a problem when trying to account for fair distribution of cost, hence the '''free-rider problem'''. National Defense suffers from the '''free-rider problem''', if a person does not pay for national defense, they cannot be exempt from its benefits (i.e. being protected from an attack).</onlyinclude><ref>J.B. Taylor. ''Economics''. Boston: Houghton Mifflin Company, 1995, pp. 512.</ref>
	<onlyinclude>When a person enjoys the benefits of a [[public good]] without contributing to the [[cost]] of it, they are known as a '''free-rider'''.~~</onlyinclude>~~<ref>A. Goolsbee, S. Levitt and C. Syverson. ''Microeconomics''. New York: Worth Publishers, 2013, pp. 674.</ref> National Defense suffers from the '''free-rider problem''', if a person does not pay for national ~~defence~~, they cannot be exempt from its benefits (i.e. being protected from an attack).<ref>J.B. Taylor. ''Economics''. Boston: Houghton Mifflin Company, 1995, pp. 512.</ref>

	To combat the free-rider problem, '''user fees''' can be charger to ensure that all who benefit from the use of the public good contribute to its cost. Lighthouses are an example of a public good which everyone (any ship using its light) benefits from but not every ship pays for the service it provides. If ships were charged a fee every time they used the light house (a fee at the port they enter) then the free-ride would not exist.<ref>J.B. Taylor. ''Economics''. pp. 513.</ref>		To combat the free-rider problem, '''user fees''' can be charger to ensure that all who benefit from the use of the public good contribute to its cost. Lighthouses are an example of a public good which everyone (any ship using its light) benefits from but not every ship pays for the service it provides. If ships were charged a fee every time they used the light house (a fee at the port they enter) then the free-ride would not exist.<ref>J.B. Taylor. ''Economics''. pp. 513.</ref>
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	==References==		==References==
	{{reflist}}		{{reflist}}
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[[Category:Done 2016-04-30]]
[[File:lighthouse.jpg|400px|thumb|right|Figure 1. The Amedee Lighthouse on the French overseas dependent territory of New Caledonia.<ref>Wikimedia Commons. [Online], Available: https://commons.wikimedia.org/wiki/File:Amedee_Lighthouse_-_New_Caledonia.jpg [Aug 17, 2016]</ref>]]

<onlyinclude>When a person enjoys the benefits of a [[public good]] without contributing to the [[cost]] of it, they are known as a '''free-rider'''.</onlyinclude><ref>A. Goolsbee, S. Levitt and C. Syverson. ''Microeconomics''. New York: Worth Publishers, 2013, pp. 674.</ref> National Defense suffers from the '''free-rider problem''', if a person does not pay for national defence, they cannot be exempt from its benefits (i.e. being protected from an attack).<ref>J.B. Taylor. ''Economics''. Boston: Houghton Mifflin Company, 1995, pp. 512.</ref>

To combat the free-rider problem, '''user fees''' can be charger to ensure that all who benefit from the use of the public good contribute to its cost. Lighthouses are an example of a public good which everyone (any ship using its light) benefits from but not every ship pays for the service it provides. If ships were charged a fee every time they used the light house (a fee at the port they enter) then the free-ride would not exist.<ref>J.B. Taylor. ''Economics''. pp. 513.</ref>

==See Also==
::::::::{| class="wikitable"
|-
| || '''Excludable''' || '''Non-Excludable'''
|-
| '''Rival''' || [[Private good]] || [[Common resource]]
|-
| '''Non-Rival''' || [[Club good]] || [[Public good]]
|-
|}

*[[Tragedy of the commons]]
*[[Externality]]

==References==
{{reflist}}